The tech industry is reeling
from President Trump’s new, surprising deal with Nvidia. Trump announced earlier this week that he would allow Nvidia to continue selling their H20 chips in China for a 15 per cent share of revenues.
The H20 is outdated. Trump said, “It’s one those things, but there is still a market for it,” at a Monday press conference. “So, we negotiated a small deal.”
The Trump administration’s decision to reverse its ban on all H20 sales in China earlier this year is a remarkable reversal. The president changed his mind after meeting Nvidia CEO Jensen Huang. Has argued allowing Chinese companies buy H20s does not pose a threat to US national security.
This is a simple tale about a president whose actions appear to have been influenced in the interest of his company by a powerful executive. The story behind how we arrived at this point is much more complex and interesting.
Nvidia launched the H20 last summer after the US government prohibited the company from selling the H800 chip to China. The move was part a larger project orchestrated by Biden Administration officials who believed that the United States had to prevent China from developing advanced AI first.
Over the past few months I’ve worked closely with Graham Webster. He is a Stanford University researcher who has been trying to understand why the Biden administration decided to restrict China’s access advanced semiconductors. WIRED publishes Graham’s definitive account today of what happened behind the scene, based on interviews conducted with more than ten former US officials and policy analysts, some of whom spoke under the condition of anonymity.
Graham told me that he wrote this article because the official legal reasons for the controls – military and human rights – were not the whole story. “AI was clearly in the mix and I wanted to know why in depth.”
Graham wrote that several key officials from Biden’s White House and Commerce Department believed AI was approaching a pivot point, or several. This could give a country major military and economic benefits. Some believed that a self improving system or artificial general intelligence was just around the corner. The risk that China would reach these thresholds before anyone else was too great to ignore.” In the fall 2022, the Biden team announced broad export controls to prevent China from gaining access to the most advanced AI chips and specialized equipment Beijing required to modernize its domestic chipmaking industry.
Graham writes that the move was the beginning of a multiyear project “that would reshape the relations between the two world’s largest powers and change the course of one of the most important technologies in generations.”
The story of Graham struck me because so many people who were involved in Biden’s export control policies have moved on to influential positions in AI, computing and national security. Jason Matheny is the president and chief executive officer of RAND. This prominent think tank, which often serves government clients, was the White House’s lead on technology and national policy. Tarun Chhabra now leads the national security policy of Anthropic. He previously worked at the National Security Council.
These career paths help contextualize different general viewpoints in the current debate over Nvidia H20 chips. Anthropic CEO Dario Amedei published a post on his blog arguing that companies should not be allowed to sell H20s in China. Amodei wrote that “well-enforced export control is the only thing that will prevent China from obtaining millions of chips” and are therefore the “most important determinant” as to whether the US and its Allies will play a leading role in the world in the future. In one section, Amodei linked to RAND’s semiconductor research .
Former deputy national security advisor Matt Pottinger and other top officials from Trump’s initial administration have expressed opinions similar to Amodei.
The other side of the argument is people like David Sacks. Trump’s AI & crypto czar has argued that “overly restricted ” export controls will allow Chinese firms to gain more market shares around the globe.
Sacks’ argument seems to have won for now. It’s not clear which of these views will be the most persuasive to Trump over the long term. This is a special edition of
Zeyi Yang’s Made in China Newsletter Louise Matsakis. You can read previous newsletters by clicking here.
